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Kelsey promises to pay Jon,her son,$5,000 if he obtains his degree at Ivy University,where he is currently in his second year.Jon graduates.Kelsey is
Discount Rate
A rate used to convert future cash flows into their present value, reflecting the opportunity cost of capital or the interest rate.
Perpetuity
An annuity that pays a constant amount to an investor at regular periods forever.
Discount Rate
The rate of interest applied in the evaluation of discounted cash flows to calculate the current value of future cash movements.
Perpetuity
A financial instrument that pays a fixed amount of income indefinitely, with no end date.
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